Zinia Achieved Success Using One Principle: Simplicity

Zinia is a local Internet and voice provider that focuses on the B2B market. The company has shown incredible growth over the last few years by making use of something called proposition simplifying. Here’s how Zinia did it.

VITAL STATS

Richard Koch, best known for his ground-breaking 80/20 principle, recently posited yet another theory that promises to change the way we look at business. And like all great principles, it isn’t really new. The fundamentals of the principle have literally been in operation since the dawn of the industrial age, but they haven’t been made explicit until now.

The simplification principle

For an early example of the principle in action, we can look at Henry Ford and his Model T. In 1906, Ford sold two models:

A ‘cheap’ version for $1 000, and an expensive one for $2 000. The company sold 1 599 vehicles. Then Henry Ford decided to democratise the automobile by creating a vehicle that the average person could afford. He started building a single, simple vehicle on an assembly line.

When this strategy came into full swing in 1914, the company charged $540 for the vehicle and managed to sell 248 307. By 1917, the price had dropped to $360 and 785 432 were sold. In 1920 alone, 1,25 million Model Ts were bought. Compared to the 1906 period, 1920 sales were 781 times greater.

Koch calls this price-simplification, and he argues that a substantial drop in price results in a much bigger spike in sales than one would expect. Dropping the price of an item by 50%, for example, doesn’t double sales, but can cause sales to increase by a factor of ten or even 100.

Make something better not cheaper

But price-simplification can be a dangerous game, especially when you’re trying to compete with manufacturing operations in places like China and India. For many companies, slashing prices simply isn’t a viable option, since you generally need to reduce prices by at least 50% to make a real impact. So, Koch suggests something called proposition-simplification. Here the focus is not on trying to make something cheaper, but to make it better.

“The objective is to make the product a joy to use: First and foremost, easier to use; then, if possible, more useful and more aesthetically appealing,” states Koch in his book Simplify.

A great example is the Apple iPhone. The iPhone certainly isn’t cheap, but its simple, minimalist design and easy-to-use interface has made it the most desirable gadget on the planet.

“As with price-simplifying, there is a common proposition-simplifying formula. It involves hiding incredible complexity through extremely clever product design, and a relentless focus on making the product both more useful and simpler to use,” says Koch. “Whereas price-simplifying is all about making it simpler for the producer, proposition-simplifying is all about making it simpler for the customer.”

The telecoms industry

With the simplification principle in mind, let’s now turn to the local telecoms industry. Go back five or ten years, and price was a major issue. If a business wanted a 4 Mbps premium business Internet line, it could easily pay R40 000 a month. Over the last few years, prices have dropped considerably, but now complexity has become an issue.

There are so many products (wireless, fibre, voice, MPLS, PBX, etc.) to consider, and so many networks to choose from, that it can all feel a bit overwhelming. And what happens when the service goes down? Who is responsible for fixing the problem? Do you contact your ISP (Internet Service Provider) or the owner of the infrastructure? Then, of course, there are also multiple bills to pay…

Zinia, established in 2009, saw an opportunity to take advantage of the situation. By offering a simplified service, it could attract customers frustrated with the status quo.

“We realised that a lot of people were very dissatisfied with their service providers. They didn’t get the service and advice they needed,” says chief commercial officer and founder Warren Bonheim.

“We also decided to focus on the B2B market, which had very specific needs that weren’t being met. Business needed Internet access, voice, PBX’s, MPLS, firewalls and a way to manage connectivity, and there was no convenient one-stop shop to go to,” says Zinia CEO Frank Mullen.

“So, we came up with a concept of ‘business simplified’. Every customer has a single dedicated contact, one bill to deal with, and proactive monitoring and communication from our side. So, a customer would never have to wonder what was going on.”

Being proactive

Success in proposition-simplifying lies in being able to hide incredible complexity from the customer and provide a seemingly elegant and simple solution. This is certainly the case with Zinia. Making life easy for the customer demands a lot of complexity in the background.

“It’s all about efficiency,” says Bonheim. “You need to be able to get to the customer as quickly as possible. This requires a lot of systems and processes, and proactive monitoring is a big part of it. Any reactive service means that the customer has already experienced a problem and is suffering as a result.

“Zinia has invested in state-of-the-art live monitoring and management software, which allows us to monitor every client with exceptional reporting. The reporting proactively notifies us of any changes in service that may require our attention, and most of the time we change the outcome so the customer is unaffected.

“We have all these reports on screens in our network operating centre, being monitored by our entire team of service and technical staff. So, when our staff communicates with a customer, we are informed and able to provide service.”

This strategy has worked incredibly well for Zinia, resulting in more than 70% growth per annum.

“Customer satisfaction is very high, which is why we’ve been able to grow so successfully,” says Mullen. “People want a service that makes life easier, not harder.”

Growth results in added complexity. Unfortunately, it is often the customer who suffers because of this. It’s easy to keep ten customers happy, but what about 1 000, or 10 000? If you want to grow your company successfully, you need to put systems in place that hide complexity from the customer and provide a pleasant and painless experience.

Read this

Simplify: How the Best Businesses in the World Succeed

By Richard Koch and Greg Lockwood

Investor and successful entrepreneur Richard Koch and venture capitalist Greg Lockwood have spent years researching what makes successful companies—such as IKEA, Apple, Uber, and Airbnb—achieve game-changing status. The answer is simple: They simplify. Their book is filled with fascinating case studies, as well as practical advice on how to simplify your own operation.

The Daily Schedules Of 10 Famous Business Billionaires

What do some of the world’s most famous billionaire business leaders have in common? Clearly, they’re all intelligent, driven, hard-working and have lots of digits in their account balances, but the similarities mostly stop when you compare their daily routines.

If you want to know how long you should sleep, when you should wake up, how long and whether you should work out or other lifestyle choices, you won’t find a consensus among the business elite. What you will find is a fascinating glimpse into the lives of individuals who have more money than most of the people on Earth combined.

Click through the slides to read about the daily routines of billionaires including Jeff Bezos, Elon Musk and Oprah Winfrey, as gleaned from clues they’ve dropped throughout the years in interviews and speeches.

Critical Lessons Dan Newman Took From CEOwise Interviews And Applied In His Own Business

When I reached the point in my business where I realised I needed to make a change if I wanted to achieve real scale, I turned to other successful entrepreneurs. What I learnt has changed my business, and helped me launch new companies with stronger foundations.

After running my agency, Druff Interactive for over 15 years, I came to the stark realisation that I should have been in a different position with my business. It should have been bigger, more successful. Don’t get me wrong. It wasn’t a bad business — quite the opposite. But it could have been more.

Determined to become a better entrepreneur, I decided to start learning from the best. I figured the best way to access the knowledge, experience and lessons I was looking for was by interviewing successful entrepreneurs with the goal of implementing what I learnt in my own business. The result is CEOwise, a collection of interviews and videos that not only document my journey of learning, but lessons I can share with fellow entrepreneurs as well.

Living up to potential

I began my entrepreneurial journey in 2001 when I launched my web and design agency, Druff Interactive. From the very beginning I thought my business would grow organically. I believed my turnover would increase each year, as would my profits, and that I would keep moving forward, year on year, until I reached 40 and could retire comfortably. In this rosy future, I’d never have financial stress again. I couldn’t have been more off the mark.

Being an entrepreneur is like being a new parent. In the beginning, it’s all excitement and butterflies. But then you get home from the hospital and realise you’re living with much more responsibility on less sleep. Such is a new business, and the reality is that you just have to deal with it and make it work.

In our first eight years, Druff grew from just me working from a spare room in our townhouse to a staff complement of 11 by 2010. I was growing organically (as planned), but in a lot of ways, that was actually a risk, at least when it came to growth. Entrepreneurs who do experience organic growth often become complacent. Although Druff was a successful business, I wasn’t pushing it as much as I should have and we began to stagnate.

The very first entrepreneur I interviewed for CEOwise, Rich Mullholland, said that “Success is only important when measured on potential, and the company has not grown according to potential at all, therefore it’s a failure.” He was speaking about his own company, Missing Link, but the lesson really struck a chord with me. I too believed that Druff hadn’t lived up to its potential.

It was one of my biggest issues. When times were great I should have been innovating and pushing my business into different areas. Allon Raiz, founder of Raizcorp, says that he’s seen too many entrepreneurs take their foot off the pedal, become complacent and their success becomes the seed of their failure.

Focused on growth

These were lessons I only started articulating after I began CEOwise, but the truth of them was already becoming apparent to me before I launched the series. Between 2010 and 2016 we worked with great clients and built an awesome portfolio of work. I was proud of what we’d achieved. And yet I knew that after 15 years the business should have been in a different position.

In hindsight, another mistake I made was not having a proper sales force to bring in the clients. We relied mainly on word-of-mouth referrals and Google Adwords to bring in sales and grow organically. Adwords was great in the beginning and the cost per click (CPC) was cheap, but as more companies got on board, CPC became more costly and less effective. And yet I didn’t adjust my strategy. Allon also says that 10% of your team should be dedicated to sales full time. Mine was not.

By December 2016 I reached the decision to start making major changes in my business. I knew I needed to learn from the best of the best, which meant tapping into South Africa’s most successful entrepreneurs. I also realised that if I was in this position, perhaps many other entrepreneurs were too. CEOwise documents my journey of learning, but it also allows me to share it. My vision is to help more people become CEO ‘wise’, so they can become wiser CEOs.

My idea was never to have a boring sit-down, boardroom interview. When I started, I wanted each interview to be centred around an activity. I contacted my first entrepreneur, Rich Mullholland, whom I’d known for many years, and asked him if he’d go SCAD free falling with me, while doing an interview on all the insights on entrepreneurship he’s learnt over the years. He was in! We ended up suspended inside one of the Soweto towers, dropping 50 metres into a net, discussing entrepreneurship. It was a complete win. At the time, Rich was just about to launch his own vlog called ‘The Get Rich Quick Show’, which I still follow to this day (and suggest you do too).

Finding solutions

Since launching CEOwise in March 2017, I have interviewed over 30 entrepreneurs, each with their own story and advice. One of the biggest lessons I’ve learnt is that there are many ways to solve a problem. This led to the creation of a segment called ‘CEOwise Advice’, in which I ask each entrepreneur to answer the same question. The variety of answers to the same question is fascinating, and proves that there are many ways to approach a situation. I’m now in the process of creating CEOwise Mentors, which asks five entrepreneurs the same question.

Over the past two years I’ve learnt even more than I hoped for. I’ve been inspired to make changes in Druff, and I’ve also started new businesses that I’ve brought my new-found knowledge into, with the goal to do things correctly from the beginning.

I’ve also fallen in love with learning, which is why I’ve read more books in the past year than I have in my entire life. I’m on a mission to become a raging success. I know I’m going to make mistakes along the way. That’s how we learn. But I’m also a better entrepreneur since I started this journey.

One of the biggest lessons I’ve learnt is not to be scared of competition, but to embrace competitors instead. When I met Gary Leicher, founder of Smudge, at a Suits & Sneakers networking event, I decided to put this particular lesson into action. Smudge had been a competitor of ours in the web design and development space for many years. Gary said he’d wanted to meet me for a while and I suggested we get together for a coffee the following week. We sat down for lunch and four hours later, after discussing the industry and processes we used, we swopped notes and left wiser than when we arrived. Don’t be scared of competition, embrace it. There is always something to learn from your fellow entrepreneurs. You just have to be open to the lessons.

Vital Stats

How does a physiotherapist who dreamed of touring the world with sports teams become a mental performance coach for high-impact entrepreneurs? Ask Erik Kruger and the term he’ll use is ‘accretion’, the process of growing and adding layers through experiences.

The point is key: No journey is ever a straight line from point A to point B. Most of us spend years figuring out what we want to do through a process of elimination. It’s by doing that we figure out what we like and don’t like; what ignites passion in us, and what we’re good at.

Erik’s journey began in physiotherapy. He graduated in 2007 and started his own private practice with a friend in 2009. He was quickly realising that his dream wasn’t aligning with reality though. “My goal was to be the physio who toured with the springboks. Instead, I was locuming at hospitals and travelling two hours a day to reach my private practice offices,” says Erik. “I couldn’t see my future in it.”

It’s an interesting lesson: Until you do something, you won’t always know if it aligns with your expectations and goals. But no experience is ever a waste. “Physiotherapy ended up allowing me to have a side hustle. I could pay the bills while I figured out my entrepreneurial journey, because I had no idea what I wanted to do when I started. I registered 45 domain names before I settled on Better Man, and Better Man led me to the Mental Performance Lab and my coaching business.”

Launches and lessons

While he was still in private practice, Erik met fellow entrepreneur and Shark Tank investor, Marnus Broodryk. “Marnus was still in his own start-up phase. We were at FTV and he was handing out business cards for his accounting business, The Beancounter, to everyone he met. I took one, but only ended up contacting him months later because I needed to set up a website, and I thought he’d be able to give me some guidance.”

The website was for the practice, and Marnus helped Erik via skype to set up his first WordPress site. In Erik’s own words, it was a terrible website, but the bug bit. From that moment onwards, Erik’s newfound love affair with the digital space began.

“I liked the idea that you could just create something and people would come,” he says. “I found out very quickly that’s not how it works at all, but by then I was playing around with as many website ideas as I could think of.”

Marnus and Erik played around with some ideas, and settled on directory sites. “The idea was that people would pay a monthly retainer to be on the website and that’s all you’d need to create annuity income. You also wouldn’t need advertising revenue, which requires ongoing sales.”

Because of his own area of expertise, Erik thought a directory for physiotherapists would work well — one of the regulating bodies disagreed. They viewed the monthly retainer as a kickback, which is illegal in the medical profession.

So, Erik moved on to his next idea. “I was doing everything over eLance and Odesk, from web development to graphic design. I started thinking that we needed a local freelance community that entrepreneurs could tap into. My brother agreed to invest in the idea and we hired developers from India to build the site. I directed them to a few sites I liked and briefed them on what we wanted.”

Six months and R70 000 later, Erik received a cease and desist call from one of the big players in the freelance space. “He was furious. It turned out that the developers we had hired had copied his website, section for section, header for header. I had been focused on client acquisition, not the development of the site — I hadn’t even checked what they were doing. I’d only focused on the feedback from beta testing. Faced with being sued for infringement, we took the site down immediately. I was trying different things and failing miserably, but I was also okay with that.”

Finding a niche

Erik didn’t let his failures deter him. “I was trying to figure out how to make money from digital assets. I registered 45 domain names, and for every one of them I built a WordPress site and developed a marketing strategy. I’d go to work, get home and just do digital for the rest of the day.”

To upskill himself, Erik also took courses on digital marketing, Facebook, Google marketing, WordPress and DNS set-ups. “I created a fitness website for brides-to-be, a mentor site for models and websites for girlfriends to help them run their businesses. Each website would be up and running for a few weeks, and then I’d lose interest, close it and move on.”

And this is where the foundation of Erik’s journey really begins. The fact that he hadn’t yet found what he was looking for was a lesson in itself. “Clarity is a process; I can see it with my clients all the time,” he says. “I didn’t know it then, but I can see it now. Clarity only really comes from wanting to find clarity, trying to find clarity. We often talk about evolution in entrepreneurial circles, but the reality is that evolution can only happen when something already exists, which means you have to be out there trying new things to find your purpose, or big idea.

“When I started coaching, what I was doing with my clients back then versus now is vastly different. No matter how much I read about coaching, thought about what coaching should be like, or listened to different coaches and how they do it, I would never have reached the point I’m at now, if I hadn’t been doing it myself. That’s how we learn and evolve.”

For Erik, the 45 websites he created led him to Better Man, and that’s where his journey started to pivot. “Better Man was the idea I stuck with. Up until that point, I’d been looking for things to do and ways to monetise them, but they were all external and not what really came naturally to me. There’s no such thing as a lightning bolt idea that hits you and that’s it. Amazing, masterful ideas are the result of trial and error.

“People think clarity is a switch, illuminating everything. But it’s actually like striking a match, and that match keeps burning, and you strike another and another and another, and slowly the room fills with light. Even then, you have clarity for a moment, and then the matches burn out, and you have to start again.”

In the case of Better Man, Erik was tired of trying to find something that would work, and instead decided to create something for himself. “I’ve always been into self-development and the idea evolved from there. I decided to create a website based on interviews I’d do with successful South Africans — I’d learn from them, and share the interviews online.”

Erik’s first interview was with Maps Maponyane, followed by Tim Noakes. The site wasn’t getting a lot of traction, but Erik was having fun. “It was the first thing I’d done where I didn’t have any real plans to monetise the site. I was just doing something I enjoyed and figuring it out.”

Erik did want to grow a community though, and so he concentrated on Facebook and email marketing to build up a Better Man database.

“I wanted to experiment with different mediums of communication,” he explains. “The two things that really moved the needle were the group, which was 18 000-strong, and the daily emails I started, which quickly reached 16 500 people.”

Through the community he had built up, Erik then found a way to monetise the business through events. “I was sharing content and ideas that struck a chord with me, which meant they were valuable to other people. That’s how I built up a community, and from there I could offer access to that community to brands.”

For 18 months, there were regular Better Man events, all sponsored by top lifestyle brands. The business was doing well, but through the platform and the community, Erik discovered a new direction: Coaching.

“Once I’d built up the community, I played around with a few different ideas, looking for ways to monetise the platform over and above events. We launched a fitness eBook, an apparel line and partnered with brands for events, but the one thing the community kept asking for was coaching. The events worked as marketing platforms — the next morning I’d sign up clients — and even though I hadn’t known that this was where Better Man would lead, I discovered it was a direction I wanted to explore.”

Focused direction

Up until that point, Erik had been trying a lot of different avenues to see what stuck. He also admits he had shiny object syndrome — even with Better Man. “I was too responsive to every question and query. You can’t just jump around and hope you’ll find success; you need focus and direction.”

Interestingly, even coaching didn’t offer that at first. Erik tried group coaching and Mastermind groups before realising he needed to really focus. It meant stopping the events and even pulling back from the community he’d built, although his daily emails continue, and all group members are the first to hear about workshops and seminars.

“Finding my path required me to sit down and take a long look at what was — and wasn’t — working for me personally. You can try and figure out what people want, and that’s important, but you also need to understand your personal drivers, or you’ll never stick with something long enough to make it a success.

“I was trying out mentor calls through the Better Man community, and I realised that they weren’t working for me. They felt superficial; like I wasn’t driving results. When I spoke to someone, I’d get off the call and I wouldn’t feel good. I’d feel like I’d just spent time telling someone what to do, but where were the results?”

Once Erik made the decision to be a coach though, his focus shifted to being the best coach in South Africa. It was that decision and direction that made all the difference. “I went out and bought every book I could find on coaching. Then I wrote all the models that spoke to me up on white boards and started creating my own coaching framework.”

From there, Erik, signed up for his Master’s Degree in Management, with a focus on business and executive coaching. By 2017 he was coaching full time.

“I had to build up my confidence, which is evident in my early pricing models, but my masters has been the biggest game-changer for me. It shifted a few fundamental things for me, from my coaching approach to developing better listening skills. Ultimately though, internal drive is the biggest differentiator. I want to be the best coach I can be, and that’s making all the difference.”

Because of that drive, Erik has also found his niche. “I want to have a big impact on the world, which means I need to help people who in turn impact the lives of others. CEOs and entrepreneurs are my focus area. My influence and impact are amplified when I’m coaching a CEO of 500 people.”

Since finding his niche, Erik has worked with a number of high-calibre clients, including some of South Africa’s top executives and entrepreneurs.

Action, not words

Better Man gave Erik the platform he needed to launch his coaching business. Although the journey has been organic, once he made the decision about what he wanted to focus on, each step forward has been far more intentional. “I believe in visualisation and intention. Intention is determining where you want to go and then breaking that down into goals. My intention is to become the most sought-after speaker and coach in South Africa. Everything I do works towards that goal.”

In line with this goal are Erik’s own experiences. “Everything we do and think is the culmination of our experiences. In my case, it’s personal experiences as well as what I learn from my clients. Coaching is a gift for me. I can spend time with the CEO of a multi-national and come up with solutions and insights that I can then share with the owner of a 30-man business. With an outsider’s perspective you can start seeing patterns. Coaching is practical, and it draws on the human experience, even in a business context.

“It’s easy to believe that you’re too busy for a morning routine for example. When I see someone who does have the time and still isn’t following a routine, I ask why. What is the deeper value or belief that they aren’t tapping into or living? What experiences of highly busy people who still find the time can I draw from and share? Every experience that is shared broadens our collective exposure.”

Personally, Erik follows many of these practices himself. “I learn about them and implement them. It makes me a better coach. We’re all human, but at the top of the business ladder, we need to perform optimally. There’s a metrics side to business, and a human side, and you can’t ignore either.

“Founding the Mental Performance Lab has been about developing a high-performance state of mind. It’s not just about smashing metrics, but functioning at an optimal level. You need to do the right thing at the right time, and to achieve that, mindfulness is key. You can function flat out, always racing ahead, stressed and busy, or you can function optimally. That’s my focus.” EM

Read This

Erik Kruger’s first book is a collection of 160 thoughtful reflections on what it takes to live a life of action and not words. Acta Non Verba’s purpose is to get people moving, creating, and generating an unstoppable drive in both their business and personal journeys.

This is not a book to read from cover to cover, in one sitting. Each day there is a new chapter waiting to be read. Put this book on your bedside table, and read a new chapter with your first cup of coffee every morning. Each message is short so you can read it quickly, in the moment, and then reflect and act on it for the entire day. It’s a book that demands action.